Demand to stay resilient, especially from central bank purchases in emerging markets.
The World Gold Council expects gold prices to remain stable in the second half of the year, with only a few upside or downside risks and opportunities. The trade association, based in London, has published its Mid-Year Outlook for the precious metal, outlining potential events and a recap of the first half of 2025.
In the first half of the year, gold rose 26% in US dollar prices, setting 26 new all-time highs. According to the report, this performance was driven by a combination of factors, including a weaker US dollar, heightened geopolitical and trade tensions, high trading volumes, and robust demand from both central banks and exchange-traded funds (ETFs).
Central Bank Purchases to Cushion Possible Safe-Haven Appeal Cooling
In the second half, however, fewer catalysts are expected to drive major price swings. The Council notes that while geopolitical risks and macroeconomic uncertainties remain, they are less likely to escalate sharply from current levels. Additionally, interest rates are expected to remain steady, and inflation is likely to cool in several key economies, potentially cooling the safe-haven appeal. However, continued central bank purchases, particularly from emerging markets, are likely to prevent sharp price declines. Additionally, demand from retail and institutional investors is expected to remain resilient, especially if equity market volatility returns or global growth slows.
Besides gold, other precious metals, including silver and platinum, also recorded notable price jumps in the first half of the year. However, the drivers for these metals are different, as both serve not only as investment assets but also have substantial industrial demand. For instance, over half of global silver production is used in industries such as electronics, medicine, and solar energy.
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